HomeMy WebLinkAboutR-11067 approving Cannabis Operator Permit Ranking Criteria and the Annual Application Submittal period (CODE-1058-2017)RESOLUTION NO. 11067 (2019 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING CANNABIS OPERA TOR PERMIT
RANKING CRITERIA AND THE ANNUAL APPLICATION SUBMITTAL
PERIOD (CODE-1058-2017)
WHEREAS, in 2017, the California legislature passed, and Governor Brown signed
Senate Bill 94, which enacted the Medicinal and Adult-Use Cannabis Regulation and Safety Act
("MAUCRSA"), repealed the Medical Cannabis Regulation and Safety Act ("MCRSA") but
incorporated certain provisions ofMCRSA into the licensing provisions established by Proposition
64;and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on May 15,
2018 and adopted Ordinance 1647 that amended Title 17 (Zoning Regulations) of the Municipal
Code to establish land use regulations for the operation of commercial cannabis businesses , and
repealed and replaced Title 9, Public Peace, Morals and Welfare (Chapter 9.10.) of the Municipal
Code related to cannabis regulation; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
on October 16, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, and continued the review of the Cannabis Operator Permit Ranking Criteria and the
annual application submittal period providing direction to staff on adjustments to be made to the
criteria; and
WHEREAS, the City Council of the City of San Luis Obispo adopted on November 27,
2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, a
resolution that established the Cannabis Operator Permit Ranking Criteria (Exhibit A) and the
annual application submittal period; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
on December 3, 2019 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, for the purpose of updating the Cannabis Operator Permit Ranking Criteria (Exhibit
A).
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
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Resolution No. 11067 (2019 Series) Page 2
SECTION 1. Findings.
1. The proposed Cannabis Operator Permit Ranking Criteria (Exhibit B) establishes the
ranking criteria for individuals who apply for a Cannabis Operator Permit to operate a
cannabis business activity in the City consistent with Municipal Code Chapter 9.10,
Section 9 .10.070 (A).
2. The proposed timeframe in which applications are submitted annually is consistent with
Municipal Code Chapter 9 .10, Section 9 .10.070 (B).
SECTION 2. Environmental Review. The project is exempt from environmental review
per the Business and Professions Code (Section 26055(h)) because the project includes the
adoption of ordinances, rules, or regulations for the purpose of regulating cannabis business
activity in the City. The City's cannabis business regulations require discretionary review and
approval of permits, licenses, or other authorizations to engage in commercial cannabis activity.
Future applications for commercial cannabis business activities in the City will be subject to
CEQA, per the normal environmental review process.
SECTION 3. Action. The City Council hereby approves Cannabis Operator Permit
Ranking Criteria (Exhibit A) and annual application submittal timeframe subject to the following
conditions:
1. All Cannabis Businesses shall be evaluated by the Cannabis Operator Permit Ranking
Criteria as outlined in Exhibit A.
2. The first annual application submittal period coincided with the first three weeks of
2019 (January 7 through close of business on January 29, 2019). Following that initial
application period, the City Council delegates its authority to the City Manager to open
up new application periods on an as needed basis to include July 1 through July 31 of
each calendar year.
3. The City Manager is authorized to make minor modifications to this evaluation criteria
to ensure that the application process is implemented in a manner that is consistent with
the intent of Ordinance 1647. Any future changes to the criteria outlined in Exhibit A
will be published at least 10 days in advance of any application period opening.
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Resolution No. 11067 (2019 Series) Page 3
4. This resolution supersedes Resolution 10966 (2018 Series) to the extent inconsistent
herewith.
Upon motion of Council Member Christianson, seconded by Council Member Pease, and on
the following vote:
AYES:
NOES:
ABSENT:
Council Member Christianson, Pease, Stewart, Vice Mayor Gomez and
Mayor Harmon
None
None
The foregoing resolution was adopted this yct day of December 2019.
ATTEST:
City Clerk
hristine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this \ ~-;---\\-day of :=b-e ehob-c.c , 2.D \ 9 .
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Applicant:
Reviewer:
CITY OF SAN LUIS OBISPO
Cannabis Business Operator Permit Scoring
Guidelines
1. Applicant will provide one hard copy and a digital copy in a readable PDF form of each application and
proposal.
2. City will compile any additional information related to the applicant for consideration.
3. Discussion between the reviewers during the evaluation will be limited to clarification to ensure an equal
understanding of the application.
4. Questions can also be directed to the consultant.
5. Each reviewer will complete a score sheet for each proposal.
6. Points may be awarded in an amount up to the possible points in each scoring criteria.
7. Each completed score sheet will be given to the consultant.
8. The consultant will review the score sheets for each proposal.
9. If there is a scoring deviation between reviewers on any scoring criteria of more than 30%, the consultant
will discuss this specific score with the reviewers.
10. An adjusted score may be agreed upon by the reviewers and the consultant.
11. Once all criteria scores are reviewed and agreed upon, the total aggregate score for the review panel will
be totaled then divided by the number of reviewers to obtain the final score.
12. For an applicant to qualify for a contingent operator permit, the applicant must score from an average of
all scorers at or above 70% of the total available points on the application of that application period.
Automatic Fail Criteria:
· Application received after the final filing date.
· Application is incomplete or inaccurate.
· Facility does not meet City business licensing standards.
· Only one license applicant allowed per location. It is the applicant's responsibility to verify that
potential landlords do not have existing, competing cannabis business applicants.
Definitions:
An "applicant" is the entity petitioning for the Cannabis Business Operator Permit.
A"principal(s)" are the individual members of the applicant team.
A "primary principal" is defined as an individual who has a 10% or greater ownership stake of the applicant
business.
An "operator" is an applicant that has been licensed and conducts or conducted active cannabis operations.
A "majority" is defined as a greater number; more than half. An equal number does not constitute a majority.
Adult-Use Retail Cannabis Merit-Based Criteria and Possible Points
All applications for a license will be evaluated using the merit criteria outlined below. Applicants must submit
supplemental documentation or references with the application that support the statements below for review
by the City.
Manufacturing, Distribution and Non-Storefront Retail Evaluation Criteria
Merit Criteria 1.0 -Community Benefit
Community Benefit (A): Applicant demonstrates a commitment to City through Possible Applicant local hiring and community support. Select all that apply within each category
and total score. (Up to 20 Points -Deviation Threshold 6 Points) points score
Over 90% of employees will be San Luis Obispo County residents. (10 points)
1.lA 10
or 60% -90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
1.2A 10
or 50% -80% of supply and equipment expense (non-labor, non-rent expense)
will be sourced from local businesses within 90 miles. (5 points)
Total Community Benefit (A) 20
Community Benefit (B): Continued support of community programs in San Luis Possible Applicant Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to
youth programs). (Up to 15 Points -Deviation Threshold 3 points) points score
Providing over 20 hours per month of community support. (5 points)
1.lB 5
or Providing 10-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
1.2B 5
or Provide up to $1,000 per month for community support. (2 points)
1.3B Applicant can demonstrate a history of supporting local community programs 5 for the past one year. (5 points)
Total Community Benefit (B) 15
Total Merit Criteria 1.0 35
Merit Criteria 2.0 -Equity and Labor
Applicant commits to equity ownership and competitive compensation in
comparison to other mainstream commercial businesses. Applicants commitment Possible Applicant
will be confirmed during annual permit renewal process. Select all that apply and points score
total score. (Up to 20 Points -Deviation Threshold 9 Points)
Applicant includes 3 or more principals with 2% equity or higher who have earned
at or below the median household income at the time of application. (8 points)
2.1 8
or Applicant includes 1 or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
businesses. (8 points)
2.2 8
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other
mainstream businesses. (4 points)
2.3 Base wages of employees exceed the minimum wage by at least $3 .00/hr. 2
Total Merit Criteria 2.0 18
Merit Criteria 3.0 -Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant Possible Applicant
business within the City. (Up to 25 Points -Deviation Threshold 3 Points) points score
3.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain 1-10 business operations.
3.2 Applicant commits to develop raw land that has been zoned for commercial use 1-10 for a commercial cannabis facility.
Applicant commits to major improvements, including fayade rehabilitation,
3.3 building expansion, site improvements and/or other investments in an 1-5 underutilized/underdeveloped site that has been zoned for commercial use for a
commercial cannabis facility .
3.4 The proposed cannabis business site can accommodate the required number of 1-5 parking spaces with safe and convenient access for customers/employees.
Total Merit Criteria 3.0 30
Totals
Total GENERAL Merit Criteria Points Available 83
Total GENERAL Merit Criteria Points Awarded
Total 0/o
Cultivation Evaluation Criteria
Merit Criteria 1.0 -Community Benefit
Community Benefit (A): Applicant demonstrates a commitment to City through Possible Applicant local hiring and community support. Select all that apply within each category
and total score. (Up to 20 Points -Deviation Threshold 6 Points) points score
Over 90% of employees will be San Luis Obispo County residents. (10 points)
1.lA 10
or 60% -90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
l.2A 10
or 50% -80% of supply and equipment expense (non-labor, non-rent expense)
will be sourced from local businesses within 90 miles. (5 points)
Total Community Benefit (A) 20
Community Benefit (B): Continued support of community programs in San Luis Possible Applicant Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to
youth programs). (Up to 15 Points -Deviation Threshold 3 points) points score
Providing over 20 hours per month of community support. (5 points)
1.lB 5
or Providing over l 0-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
1.2B 5
or Provide up to $1,000 per month for community support. (2 points)
1.3B Applicant can demonstrate a history of supporting local community programs for the 5 past one years. (5 points)
Total Community Benefit (B) 15
Total Merit Criteria 1.0 35
Merit Criteria 2.0 -Equity and Labor
Applicant commits to equity ownership and competitive compensation in
comparison to other mainstream commercial businesses . Applicants commitment Possible Applicant
will be confirmed during annual permit renewal process. Select all that apply and points score
total score. (Up to 20 Points -Deviation Threshold 9 Points)
Applicant includes 3 or more principals with 2% equity or higher who have earned
at or below the median household income at the time of application. (8 points)
2.1 8
or Applicant includes l or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
husinesses. (8 points)
2.2 8
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other
mainstream businesses. (4 points)
2.3 Base wages of employees exceed the minimum wage by at least $3.00/hr. 2
Total Merit Criteria 2.0 18
Merit Criteria 3.0 -Medical Retail Commitment
Medical Retail Commitment (up to 10 points) Possible Applicant
points score
3.1 Applicant commits to retain a California state medicinal cannabis cultivation IO license.
Total Merit Criteria 3.0 10
Merit Criteria 4.0 -Sustainability
Applicant demonstrates past experience in and/or commits to sustainable and
environmental business or building practices utilizing recognized industry Possible Applicant standards. Applicants actions will be confirmed during annual permit renewal
process. Select all that apply and total score. (Up to 20 Points -Deviation points score
Threshold 6 Points)
4.1 Applicant will recycle waste water (utilize purple pipe when available). 5
4.2 Applicant will utilize certified organic practices . 3
4.3 Applicant will utilize carbon free power sources for majority of power. 5
4.4 Applicant will utilize energy efficient lighting. 4
4.5 Applicant has plan to reduce water waste. 3
Total Merit Criteria 4.0 20
Merit Criteria 5.0 -Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant Possible Applicant
business within the City. (Up to 25 Points -Deviation Threshold 3 Points) points score
5.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain 1-10 business operations.
5.2 Applicant commits to develop raw land that has been zoned for commercial use 1-10 for a commercial cannabis facility.
Applicant commits to major improvements, including fa9ade rehabilitation,
5.3 building expansion, site improvements, removing visual blight, and/or other 1-5 investments in an underutilized/underdeveloped site that has been zoned for
commercial use for a commercial cannabis facility.
5.4 The proposed cannabis business site can accommodate the required number of 1-5 parking spaces with safe and convenient access for customers/employees.
Total Merit Criteria 5.0 30
Totals
Total Merit Criteria Points Available 113
Total Merit Criteria Points Awarded
Total 0/o
Retail Evaluation Criteria
LJ I Merit Criteria 1.0 -Community Benefit I
Community Benefit (A): Applicant demonstrates a commitment to City through Possible Applicant local hiring and community support. Select all that apply within each category
and total score. (Up to 20 Points -Deviation Threshold 6 Points) points score
Over 90% of employees will be San Luis Obispo County residents . (10 points)
t.tA 10
or 60% -90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
l.2A 10
or 50% -80% of supply and equipment expense (non-labor, non-rent expense)
will be sourced from local businesses within 90 miles. (5 points)
L_j
[otal Communi9: Benefit (A) I I 20 I I I
Community Benefit (B): Continued support of community programs in San Luis Possible Applicant Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to points score youth programs). (Up to 10 Points -Deviation Threshold 3 points)
Providing over 20 hours per month of community support. (5 points)
1.18 5
or Providing over 10-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
1.28 5
or Provide up to $1,000 per month for community support. (2 points)
1.38 Applicant can demonstrate a history of supporting local community programs. (5 5 points)
L_j
[otal Communi9: Benefit {B} I I 15 I I I
LJ [otal Merit Criteria 1.0 111 35 I I I
2
2 While the City has reached its cap on storefront retail operator and staff is not recommending any updates to storefront retail criteria,
Merit Criteria 2.0 -Experience
Record of compliant current or previous business operations: Applicant has
previous record of operating a compliant cannabis operation (including medical).
A compliant operation is defined as having a substantially compliant record (may Possible Applicant have some minor resolved/corrected violations) without a documented history of
unresolved local or state level violations relating, but not limited to: business code, points score
public safety, environmental impacts, employment, and financial payments. (Up
to 30 Points -Deviation Threshold 9 Points)
91 % to l 00% of the primary principals have operated a local compliant cannabis 35 operation for 5 or more years.
or 81% to 90% of the primary principals have operated a local compliant 30 cannabis operation for 5 or more years.
2.1 or 71% to 80% of the primary principals have operated a local compliant 25 cannabis operation for 5 or more years.
or 61 % to 70% of the primary principals have operated a local compliant 20 cannabis operation for 5 or more years.
or 51 % to 60% of the primary principals have operated a local compliant 15 commercial cannabis operation for 5 or more years.
10-50% of the primary principals operated a compliant cannabis operation outside 10 of SLO County for 5 or more years.
2.2
or 10-50% of the primary principals operated a compliant cannabis operation 5 outside ofSLO County for less than 5 years.
Total Merit Criteria 2.0 35
Merit Criteria 3.0 -Equity and Labor
Applicant commits to equity ownership and competitive compensation in
comparison to other mainstream commercial businesses. Applicants commitment Possible Applicant
will be confirmed during annual permit renewal process. Select all that apply and points score
total score. (Up to 20 Points -Deviation Threshold 9 Points)
Applicant includes 3 or more principals with 2% equity or higher who have earned
at or below the median household income at the time of application. (8 points)
3.1 8
or Applicant includes I or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
businesses. (8 points)
3.2 8
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other
mainstream businesses. (4 points)
3.3 Base wages of employees exceed the minimum wage by at least $3.00/hr. 2
3.4 Business will allow "labor peace agreement" at 20 or more non-management 2 employees.
Total Merit Criteria 3.0 20
Merit Criteria 4.0 -Messaging
4.1 Applicant commits to responsible use messaging practices. Select all that apply Possible Applicant
and total score. (Up to 10 Points -Deviation Threshold 3 Points) points score
4.2 Business articulates strategy to keep cannabis from being diverted to minors 1-5 including advertising that is appropriate ly targeted to adult audiences.
Business promotes responsible use including messaging on packaging, offering
4.3 lower dose THC product options, offering to track use via "user determined 1-5 quotas", posting information on cannabis use disorder and cautions re:
development of the adolescent brain.
Total Merit Criteria 4.0 10
Merit Criteria 5.0 -Medical Retail Commitment
Medical Retail Commitment (up to 10 points) Possible Applicant
points score
5.1 Applicant commits to provide retail medical cannabis products to consumers. LO
Total Merit Criteria 5.0 10
Merit Criteria 6.0 -Property Control
Control of business location: Applicant demonstrates control of a site to ensure a
successful and timely transition from being awarded a license to opening the Possible Applicant
business. Incomplete purchase or lease agreements do not constitute site control. points score
(Up to 10 Points -Deviation Threshold 3 Points)
Choose one:
6.1 Majority ownership in site property. 10
6.2 Minority ownership in site property. 8
6.3 10+ years future lease of site property . 8
6.4 5-10 years future lease of site property . 5
6.5 2-5 years future lease of site property. 3
6.6 Less than 2 years future lease of site property. 1
Total Merit Criteria 6.0 10
Merit Criteria 7 .0 -Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant Possible Applicant
business within the City. (Up to 25 Points -Deviation Threshold 3 Points) points score
7.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain 1-10 business operations.
Applicant commits to major improvements, including far,:ade rehabilitation,
7.2 building expansion, site improvements, removing visual blight, and/or other 1-5 investments in an underutilized/underdeveloped site that has been zoned for
commercial use for a commercial cannabis facility .
7.3 The proposed cannabis business site can accommodate the required number of 1-5 parking spaces and safe and convenient access for customers/employees.
Total Merit Criteria 7.0 20
Totals
Total Merit Criteria Points Available 140
Total Merit Criteria Points Awarded
Total%